…because they can

If I had a penny for every time that thought had popped into my head in response to a question I’ve been sent, I reckon I could easily have £17.28.

Whilst not much money, it’s a lot of people. Whether it’s emails to the site, suggestions for Question of the week in the email, or emails for my News of the World column, whatever the subject the answer’s the same…

Here’s some recent examples…

How can a credit card provider increase the credit card APR from 16.9% to 34%?

How can credit reference companies justify charging £70 a year for files that only cost £2?

How can Ryanair charge £10 per person each way just for paying by debit card?

How can Tesco justify giving me less compensation because I spotted their mistake before leaving the store, rather than having to come back?

How can companies deny me a mortgage just because I’ve become self employed?

These are the tip of the proverbial iceberg. The problem stems from the fact most people assume that companies need to behave fairly, or that we’ve a right to access their services. This is especially true with questions starting “How can they justify…”. Inevitably the answer is, because they don’t justify it; you can either choose to access that service/buy that good or not.

Let’s re-examine those example questions above, this time with an expanded answer – purely from a technical basis not considering fairness.

How can a credit card provider increase the credit card APR from 16.9% to 34%?…because it can. Your credit agreement says it can, and there’s no regulation limiting APRs. In the terms it says your rate is variable, as an aside t also almost certainly says it could demand you repay in full too. Now you could and probably should question the ‘fairness’ of this one with the Financial Ombudsman- and there is a chance – but in general “because it can” still stands.

How can credit reference companies justify charging £70 a year for files that only cost £2?…because they can. They can charge what they like for their services; it’s our choice whether to buy them. The law only says that they must offer access to credit reference files by POST for £2. They have no need to justify their charges, their need is to sell their services and persuade you it’s worth paying (see the credit scoring guide for how to beat them).

How can Ryanair charge £10 per person each way just for paying by debit card? …because it can. There are no rules stopping airlines adding extra charges for paying by debit card. It’s arguable though that to describe these as ‘extra’ due to the fact Electron cards are free is wrong, and I hope we’ll see pressure brought to bear to change this soon (see the Beat Budget Airline charges note for how to beat these).

How can Tesco justify giving me less compensation because I spotted their mistake before leaving the store, rather than having to come back?…because it can. That’s a Tesco internal policy, which is far more generous than the law sets out, so as long as it follows clear guidelines, it can do what it wants.

How can companies deny me a mortgage just because I’ve become self employed?…because they can. You have no right to borrow money, whether a mortgage, loan or credit card. Lenders are private companies trying to make profit and if they don’t want to take the risk lending you cash they needn’t. Sadly they perceive self-employed people as less certain so a higher risk. This isn’t an issue for an individual company, it’s one to take up with politicians and regulators if we want borrowing to be available we need lobby them to put controls in place (or make the banks they now own actually work).

Overall the answer is there are times to exercise our rights, but when we have no rights it’s time to exercise our choice and not use the company’s services any more. The worry is when there’s no choice and it’s a systemic, industry-wide issue. Then it’s time to campaign (part of what MSE’s here for).

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